During the last few years many of the leading insurers have been releasing their claim statistics for critical illness cover and income protection. This information is very useful to know as it gives you an insight to what policyholders are claiming for, and also peace of mind in knowing that the insurance actually pays out!



Let's look at the statistics from DPS.

Established in 1908, Dentists' Provident Society is the leading provider of income protection insurance to dentists in the UK and Ireland.

They serve over 13,000 members and as they specialise in dealing with members of the dental profession they have been able to compile detailed information to demonstrate the value of income protection insurance.

Highlights:

- In 2006 DPS paid claims totalling £2.7m

- On average, they paid 121 claims each month

- The largest claim in 2006 amounted to £32,100 (average £1,893)

- On average, 11% (1,456) of their insured members claimed benefits in 2006

- The average age of claimants was 43

- The average duration of short term claims in 2006 was just under 4 weeks

Let's look at some examples of claims in 2006:

Male - age 49 - Stroke - 11 years claim duration - £116,730 paid (to end 2006)

Female - 54 - Spondylosis - 1 year - £33,858

Male - 56 - Torn tendon - 1 month - £2,700

Male - 38 - Depression - 4 years - £162,400

Female - 28 - Back strain - 2 weeks - £1,500

Male - 25 - Renal disease - 1 year - £19,200

As you can see, the reasons for claims are varied, and many of them would not have been eligible for a claim under a critical illness policy.

The good news is that as DPS are a mutual organisation, they do not have any shareholders and are run solely for the benefit of their members. Their claims philosophy is based on the principles of fairness, honesty and sympathy. In fact, out of the 1,456 claims in 2006, only an additional 4 resulted in claims-related complaints.

DPS New Contract

As you may be aware, Dentists' Provident Society revamped their income protection plan at the start of 2008. This has resulted in a myriad of new options to consider. One of the main changes is that you are now able to set up your cover with inflation protection.

It is more than likely that if you are an existing DPS member your current plan will be set up on a level benefit basis or reducing benefit.

What you can do now is contact DPS and ask them to provide you with a quote for one of the inflation protected plans. Do take care with this though, as there are different types of the inflation protected version!

Just making this one simple change to your cover could make a huge difference if you need to claim over the long term.

Key Considerations:

Income protection should really be seen as one of the most important types of insurance that you can hold. After all, if you are unable to work for a number of years it's more than likely a lack of income will have a big impact on your life.

Why take the chance?

ACTION POINT

Take the time to review your existing level of income protection and ensure you have enough cover in place to at least provide for your monthly essentials. Either do your own research or speak to a specialist who can help you choose the right package.